Hydrocarbon Exploration Licensing Policy (HELP)

The Government notified a transformative policy namely Hydrocarbon Exploration and Licensing Policy (HELP) on 30 March, 2016 to increase investment in domestic exploration and production sector. The major thrust of the policy was ease of doing business with minimal Government intervention.

Hydrocarbon Exploration Licensing Policy (HELP)

Deepening the reforms further, Government on 28 February, 2019 notified further reforms in HELP, inter alia, bringing changes in auction methodology. With the introduction of these reforms, Government moved from ‘Maximisation of Revenue to Government’ to ‘Maximisation of Production’.

The major changes include:

  1. Indian Sedimentary basins were classified into three categories, namely Category - I, II and III, based on hydrocarbon prospects and commerciality. In Category-II and Category-III basins, where prospect is low, the areas are to be awarded exclusively based on Work Program which bidder commits to undertake without any Revenue Share to Government. Revenue is to be shared with Government in case of windfall gain i.e. when revenue exceeds USD 2.5 billion in a financial year.
  2. In Category-I basins, where commercial reserves are established, for awarding the blocks, emphasis was shifted to Work Programme by enhancing its weightage to 70%. Remaining 30% weightage was allocated to Revenue to the Government. This was 50% each earlier. Further, to prevent speculative bidding, upper ceiling of 50% was also imposed on Revenue Share to Government.
  3. To provide more opportunities to bidders, Expression of Interest submission cycle was increased from twice to thrice in a year.